Arguments in favor of Social Responsibility of Business

Arguments for Social Responsibility i.e. Need for Assumption of Social Responsibility

The recent trend is in favor of assuming social responsibilities. Several big business houses and business groups have accepted this concept as an underlying philosophy in modern business.

Arguments in favor of Social responsibilities of Business

Image: Arguments in favor of Social responsibilities of Business

In a more logical fashion, Keith Davis has advanced many good points in favor of corporate social responsibility. His line of arguments are given below:

1. Viability of Business: A business corporation exists only because it performs certain valuable services to the society. If a business firm wants to retain its existing role and social power, it must respond to the society’s needs constructively. They alone have earned goodwill, reputation and support of the society as a whole.

2. Long run Self-interest: Keith Davis argues that the firm, which is more sensitive to the community’s needs will have a better community in which it will conduct its operations. It will get honest laborers, good customers and prompt suppliers. It will create a better society and produce a better working environment. Consequently the profit will be maximized. Thus, assumption of social responsibility also has an element of long run self interest Keith tells this concept as the “Iron Law of Responsibility“.

3. Better Public Image: Social goals are now a top priority with the members of the public. Therefore, a firm, which wants to capture public image, should aid in accomplishing the social objectives

4. Avoidance of Government Regulation: Regulations are constraints to all business organizations. If the businessmen fail to accept their social responsibility, the Government has no other alternative other than to intervene and safeguard the interests of the society by exercising control over business. By voluntarily assuming social responsibilities, the businessmen can prevent or at least minimize the Government intervention.

5. Businessmen have Resources: Businessmen command considerable power on the productive resources of the community. The power to command the national resources is delegated to them by the society with high expectations. Therefore, they should not use their power against the expectations and needs of the society. They should also honor social obligation while exercising the power.

6. Prevention is better than Cure: We have already stated that voluntary assumption of social responsibility shall at least minimize the need for Government intervention.

By assuming social responsibilities, businessmen can win the over confidence of the workers and ensure industrial peace. If they refuse to accept this responsibility the situation shall become uncontrollable. Consequently the state will intervene and regulate the business. Such a situation will endanger the business interest and lead to loss of a reputation as well as a loss of more money.

To avoid all these possible social pressures and control, it is advisable on the part of the businessmen to behave in a socially responsive manner from the beginning i.e. from the moment they enter into business. Thus, prevention is better than cure that is pro-action is better than reaction.

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